I was shocked, to say the least, and very disappointed. I had just quoted a retail price of $75 for a sapphire I knew would cost me $50, and I also offered to set it for free. My customer’s incredulous reply, “Is that the best you can do?” I was friendly, of course, and replied that was a great deal, but the customer left anyway.
That simple encounter and the realization that “I could and should do better” led me to rethink how I discounted my merchandise and services.
As I pondered my reasoning for discounting, I uncovered a tangled web of reasons why I offered discounts and they all would certainly lead to the death of my store if I did not make some changes.
Observation Number 1
Discounting can be a form of laziness. Instead of educating my customers on the difference between the quality of items and the influence on price, I could just simply drop my price and hope to make the sale.
Observation Number 2
I am going to make friends. I believe business is personal and it should be, but you also need to remember business is business. People looking for the lowest price only care about the lowest possible price. They will not miss you if you are gone.
Observation Number 3
Money is not the king. Yes, you are about to give up $1,000 of your hard earned cash, but I am also giving you a beautiful piece of jewelry, one that will bring great happiness and joy, a precious piece of jewelry crafted with the rarest of earth’s treasures honed by skilled craftsmen and designed by inspired artisans. That is worth every penny.
Observation Number 4
Any sale is better than no sale. Even if I discount so low that I only make 5%, that is better than nothing, right? This concept will only make sense to you if you do not understand your costs. Even just picking up the phone and ordering a finished piece in for immediate pick-up has a cost greater than goods sold. Payroll, credit card processing fees, and even packaging all factor into that item’s cost. Know what those costs are.
Observation Number 5
I know what you want to spend before you even say a word. Everybody wants a deal; I will just offer it right off the bat. However, most people are looking for a good value, which is quite different from a low price.
Over the past several years, I have realized that we get so many referrals for a plethora of reasons, such as quality repair work that is completed in a timely fashion right on site, a friendly staff that is educated on the industry, and integrity that can only be earned. People do not remember the “good deal”. That is rather cliché.
Charles Neugebauer is a second generation master jeweler and owner of The Gilded Artisan, a trade shop and retail store in Colorado Springs,
